On August 26, the London Evening Standard published an article reporting on an interview with Lisa Osofsky, Director of the United Kingdom Serious Fraud Office (SFO). In the interview, Osofsky commented on a number of topics relating to the SFO’s work, including the following:

White-Collar Investigative Techniques: Osofsky touted the effectiveness of the U.S. Department of Justice’s use of tax-related criminal offenses in pursuing complex criminal cases, such as the FIFA-related corruption cases. The Evening Standard quoted her as saying that “she plans to work with HM Revenue and Customs [HMRC] to uncover breaches, then tell offenders: ‘You can spend 20 years in jail for what you did or wear a wire and work with us’.”

Unexplained Wealth Orders (UWOs): Osofsky stated that UWOs, on which the High Court ruled favorably last October, “were a ‘very good tool’, but that they have tried and failed to identify possible targets so far.” She added, however, that unspecified “other new powers were being used.”

Adequacy of United Kingdom Criminal Law: Osofsky blamed the SFO’s low number of convictions “generally on outdated legislation.” She stated that she felt “hamstrung that when we are talking about corporate fraud we are still labouring under an old law that tells me I can’t put a company in the dock unless I have the controlling mind.”

SFO Conviction Rate: Most notably, Osofsky stated that certain individuals – “some of [whom] may have been elected officials” – had rebuked her “for securing too many convictions.” In Osofsky’s words, she was asked, “ ‘What’s your conviction rate?’ And at the time it was 75 per cent for individuals, 85 per cent for companies and I thought ‘Oh God, they’re going to think that’s too low.’ “No, that was too high — this is what I hear back. If you are winning so many, you are not taking on the hard ones.”

Note: Osofsky’s remarks provide further indications of the directions that she and the SFO are likely to take in selecting new cases and conducting investigations. Osofsky has previously indicated her interest in using the U.S. Department of Justice’s technique of “persuading insiders to co-operate with investigators to speed up criminal probes.“ Expanding the scope of criminal investigations to identify potential offenses with longer terms of imprisonment could expedite that process. In addition, her stated concern about the continuing effect of the Tesco “directing mind” test in criminal fraud cases seems to indicate that she will continue the SFO’s support for extending the “failure to prevent” offense concept beyond bribery and tax evasion to fraud and money laundering.

The most disquieting aspect of Osofsky’s remarks is the indication that some elected United Kingdom officials may be trying to exert political pressure on her exercise of prosecutorial discretion. Certainly the SFO’s recent losses in well-publicized cases, such as the Tesco executives’ retrial and the EURIBOR prosecutions, do nothing to enhance the SFO’s credibility, or move it toward becoming (in the words of Osofsky’s predecessor, Sir David Green) “a vigorous investigator and enforcer of the topmost level of serious and complex fraud, plus commercial bribery.”

On the other hand, the unnamed officials’ comment that “If you are winning so many, you are not taking the hard ones” reflects a fundamental misunderstanding of the work of prosecutors, including the importance of conviction rates. While a 100 percent conviction rate should be highly suspect – for example, because prosecutors may choose to bring only the most egregious criminal cases or due process limitations may reduce the odds of acquittal – so should a conviction rate of 75 percent or lower, which would tend to indicate inadequacy in prosecutors’ competence and training, case selection, or case preparation.

Moreover, Osofsky’s extensive experience with federal criminal investigations and prosecutions helps to explain why she would consider a 75 percent conviction rate for individuals to be too low. In the U.S. federal judicial system, the conviction rate since the 1960s rose gradually over two decades from approximately 75 percent to approximately 85 percent. It is now routine for United States Attorneys and other Justice Department officials to consider a 90 percent conviction rate – even taking into account the most complex criminal cases, such as fraud and corruption – an absolute minimum standard of performance. As of Fiscal Year 2017, for example, the Justice Department’s conviction rate for all white-collar crimes was 90.9 percent (5,868 out of 6,456 criminal defendants).

The object, in other words, should be to achieve a high rate of just convictions in all categories of meritorious cases, easy and hard. Any United Kingdom official who may believe otherwise, and insists that the SFO should lose more cases in order to increase its credibility in political circles, risks doing further damage to an agency that is critical to the United Kingdom’s efforts to combat fraud and corruption.

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Published by Jonathan J. Rusch

I'm a lawyer and consultant interested in corporate- and individual-compliance issues, and an inveterate part-time law professor; a former federal prosecutor, regulator, and anti-bribery and corruption compliance head at a global financial institution; and a (very minor) shareholder in Williams Grand Prix Engineering.
View all posts by Jonathan J. Rusch